Larner Efficiency Exhange Presentation Nb

Improvement andEfficiency

South East

Dr Andrew Larner

Managing Director

Improvement and Efficiency South East

Getting more with less by using smarter procurement



The challenge of 25% cuts

• 25% of central funding varies between 5% and 20%

• Over the last 5 years councils have experimented with new ways of working. Nationally there have been over 1000 efficiency projects.

• To cut costs by 25% the logic is clear:– do the basics to reduce third party costs– re-engineer your business to be leaner and fitter and

release assets– share services between councils and between the

public sector and release more assets– stop doing things and where possible get the customer

to do them for themselves or the community on their behalf.

• We have to do this whilst at the same time delivering:– apprenticeships; reductions in CO2 emissions; support

for SME’s and the local economy; transparency

• Procurement is a key means to these ends



Doing the basics

• On average third of external spend is on commodities

• In simple terms we need to know:– Have we got the best price– Are we using the prices we agreed– Are we managing demand

• Finding the best deal– Don’t buy if you don’t have to– More access to knowledge– Use of public sector buying organisations

• Making sure we use the agreed prices– Still common to find only 25% spend on contract– Tailoring finance systems to keep spend on contract– Using web based procure to pay solutions

• Are we managing demand– Monitoring external spend



Help reduce audit and inspection



Reshaping markets

• External spend for public sector in England is £221Bn …• of which £50Bn is local government• 96% of our external spend is in 4 areas

WasteConstruction Corporateservices

Social care

• A reduction in commodity spend is essential but …• 10% reduction in commodity spend is only 1.5% of

total spend• So we need to address these markets



Collaborating on construction

• Public sector across the south east has collaborated on construction

• The programme is popular with the public bodies using it and contractors alike

• We have a programme in excess of £1 billion

• Costs and time are down through early contractor involvement

• Quality is up through leveraging our combined spend

• A further £300m this year



… and tackling CO2 emissions

HCC HQ• 75% more staff accommodated• 30% more space efficient

(staff per floor area)• 4500m2 reduction in the

council’s use of office space• £200,000 per annum on

running costs • 50% reduction in energy costs

Collaborative procurement• Design team hand-picked using

existing framework arrangements and OJEU competitive tender.

• HCC/MACE/Bennetts undertaking programme and change management, FF&E design, move management and facilities management in-house.

• Early engagement with the main contractor on completion of the feasibility stage.

Staff Benefits• 100% staff satisfaction• Improved productivity and

communication



… and applying the lessons

• We can repeat the success in construction for Corporate Services and Waste Management

• But whilst we can drive down unit costs total cost is rising:

– Waste from the move from landfill to incineration– Social care from an ageing population

• So whilst we can do the basics, reshape markets this wont be enough …



... so we need to stop doing things the same way …

Collecting rubbish without collection

Sharing learning online



… and just stop doing some things …• So the customer needs to make

the best deal

• The Care Funding Calculator– Better specification of need– On average cost reduction

• Enabling the customer to do the calculation

– Customers who hold budget– Self funders

• “Care bay”– Enabling exchange of service in

the community– Reducing dependence of formal

care– Bringing transparency to the

market



... and start doing others

East Sussex Coast

• a large retired population

• Fire regulations changed

• Large costs

• Reducing residents savings

• Closer to need for support

Not our problem?

• We do rate traders

• Why not procure commodities?

• 2 pilots showed 40% and 60% savings



So what are the barriers?

• Council sovereignty• ‘not invented here’• Local capacity• Supply chain management behaviour• Collaborative arrangements do not exist

The obstacles are not technical. Local Government can now define, procure and deliver some of the most complicated projects in government.



Debate

Documents

Larner Efficiency Exhange Presentation Nb